Looking after your credit score has always been a vital task as it impacts your access to the best financial products, the interest rates you are charged and so much more.
Over the years, there have been no shortage of articles and tips on how best to manage your credit record & score, but there are a couple of newer options that people may not be aware of.
Hot off the press, BuildMyCreditScore has just launched a new initiative to help consumers improve their credit score simply by carrying out their everyday small value spending on a new debit card.
By using Open Banking technology, the new debit card is linked to your bank account and your purchases are debited to your existing bank account 2 working days later – so in effect BuildMyCreditScore is providing a micro loan every time you make a purchase.
Daily spend on the card is capped at around £30 per day, so it’s not designed for larger payments.
At the end of each month your purchase activity is reported to the three main UK credit score companies, i.e, TransUnion, Equifax and Experian.
In trials, users found that users scores improved by 11-55 points within 3 months and it is expected to improve further over the course of 12 months.
There is a fee for the service, currently £7.95 per month (cheaper annual or half yearly options are available too).
In the past it’s been suggested that taking out a credit builder type credit card for small transactions and then repaying each month is a way to improve your credit status and score. The downside of this strategy is that interest rates can be very high (39% to 69% APR) and if you don’t repay in full then the interest charges can cause further financial pressures.
Another less well known credit score option worth exploring is the ‘Boost’ service available if you sign up to view your credit score with Experian.
Before Boost became available, many of your regular payments, such as Council Tax and regular Spotify payments, didn’t influence your credit score, but now, Boost helps take them into consideration.
There’s no guarantee that boost will work for everyone, but there’s nothing to lose as connecting to Boost won’t make your score go down.
So if you’ve not taken much interest in your credit score recently, because you didn’t think there was anything you could do to improve it, now’s the time to see if you can give your score a shot in the arm and start things moving in the right direction.
